BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Melissa Verplancke and Gauthier Callens, Linklaters
eral factors, including the specific legal struc - ture chosen for holding property, the volume of assets held by such entity and the nature and quantity of agreements in force with respect to these assets (for example, leases, maintenance contracts, etc). Accounting obligations entail, among others, the filing of yearly financial state - ments (which must be approved by the general meeting of the shareholders). Additionally, if the entity meets the criteria for having to appoint a statutory auditor (or decides to opt-in for the appointment of such auditor), a specific annual report on the annual accounts will be prepared by them annually. The fees for these accounting services, including those for external accountants and company audi - tors, are generally in the range of EUR20,000 to EUR40,000. With respect to SREIFs, an annual financial report must be drafted by the SREIF and com - municated to its shareholders, which must include the statutory accounts, a table detail - ing the cash-flow flux, the statutory auditor’s reports as well as various mandatory analysis with respect to the accounts and operations. Such requirements, including the appointment of a licensed manager if the SREIF meets the relevant legal requirements, can increase the accounting and compliance costs of the SREIF, which can be above EUR75,000. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time There are two types of limited-duration real estate use rights:
• property rights (eg, long-term leases/rights to build); and • personal rights (eg, lease agreements). 6.2 Types of Commercial Leases Business premises can be leased via a retail lease (in case of direct contact with clients), regulated by the 30 April 1951 law and regional decrees (essentially composed of imperative provisions), or a common law lease for other uses such as offices, covered by the Civil Code (with generally suppletive provisions). 6.3 Regulation of Rents or Lease Terms Lease terms, including rental arrangements, are usually negotiable (but will depend on the business activities carried-out in the premises). Common law leases (eg, office leases) often include clauses to prohibit retail activities in the premises in order to avoid the application of the mandatory retail lease law. Fixed rent, typically indexed annually, is com - mon in Belgium, but variable rent (with a guaran - teed minimum) based on turnover is often used for hotels, shopping centres, and some food and retail businesses. Temporary contractual rent reductions or exemptions can also be arranged between the parties. 6.4 Typical Terms of a Lease Length of Lease Term Retail leases have a minimum nine-year term with triennial termination rights granted to ten - ants (and, sometimes, to the landlord) as well as up to three renewal options. Special “pop-up” retail leases (regulated at the regional level) offer shorter terms. Common law leases require no specific duration but cannot be perpetual. For third-party enforceability, all leases must be reg - istered and leases over nine years also require execution in the form of a notarial deed.
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